The 4% Rule Produces Unacceptable Risk for America’s Retirees
For decades, some financial professionals have counseled clients that they should be able to safely withdraw four percent of their assets each year as a means of providing retirement income, while maintaining an account balance large enough to keep income flowing through the years.
However, while some of the underlying thinking behind the so-called four percent rule was prudent, it was hatched in an era in which interest rates were much higher, capital markets less volatile, and most importantly, Americans had shorter lifespans.